Toronto ends above the flat line

Canadian consumer price rise hotter than expected

By

SusanLerner

NEW YORK (CBS.MW) -- Canada's major indexes ended Friday's session with small gains, buoyed by strength in the energy sector, while their U.S. counterparts on Wall Street ended lower following a spate of negative news in the drug sector.

South of the border, both the Dow Jones Industrial Average
DJIA, +0.45%
and the Nasdaq Composite Index
$COMPQ
ended down 0.5 percent as pharmaceutical giant Pfizer Inc. plunged to multi-year lows after disclosing that a cancer study involving its arthritis drug Celebrex revealed indications of a heightened cardiovascular risk. Read more on Pfizer.

In the latest economic news, Statistics Canada reported that consumers paid 2.4 percent more for the goods and services included in the Consumer Price Index basket in November 2004 than they did a year earlier. That increase followed a 2.3 percent rise in October.

"Canadian consumer prices accelerated much faster than expected in November, but outside of car prices -- which revved up significantly -- inflation for many consumer goods and services remained stuck in the slow lane," CIBC World Markets economist Warren Lovely told clients.

Lovely said the key issue is whether the price increase for cars sticks or whether discounting re-emerges.

"Even after today's surprise, core inflation remains in line with expectations laid out by the Bank of Canada in their latest monetary report," the economist added. He noted that core-rate inflation may pick up slightly in 2005, but that "it should hold south of the Bank's 2 percent target next year, with growth faltering in wake of the Canadian dollar's earlier run-up."

Six of the TSE's 10 sector gauges closed to the downside, paced by a 1 percent slide in health care, while energy led on the upside with a 1.7 percent gain.

Energy stocks were on the climb as crude-oil prices topped $46 a barrel, lifted by colder U.S. weather and other concerns about overall supplies. Crude for January delivery closed at $46.28 a barrel on the New York Mercantile Exchange -- its highest close since Nov. 30 -- up $2.10, or 4.8 percent, for the session. See Futures Movers.

Also grabbing investors' attention was telecommunications company Telus Corp. (T), which boosted its 2004 outlook, reflecting in part improved trends in its mobility wireless segment.

The company raised its 2004 forecast by 5 Canadian cents, to a range of C$1.50 to C$1.55 per share, and said it expects earnings per share of C$1.65 to C$1.85 and revenue of C$7.9 billion to C$8 billion in 2005.

Shares of Telus ended the session up 72 Canadian cents, or 2.1 percent, at C$35.02.

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